keep going and don't give up !
The only advice I can give is that my engine went through crapton loads of oil before settling in. I suspect the valve seals are the culprit as a motorbike friend pointed out the classic symptoms. Lots of oil seeps down into the cylinders while the vehicle is left and on starting with lots of choke, it pushes this oil out of the exhaust and makes a mess of the shed floor. Once the engine is running, a little bit of smoke was left and this has slowly abated after almost 2000km. I went through 6 litres of oil.
When the expansion cap lets go, it releases a lot of pressure and water gushes out everywhere, even when the engine is running at the correct temperature. My slightly loose expansion cap worked its way off just after I arrived home and sprayed green water all over the shed floor. The cap must be on securely with a good rubber gasket under its foot. Moral of the story, don't take the cap off when the engine is warm. As the other guys have said, that extra pressure is vital to stop the water boiling
Looking at the pics of the oil and water in the cylinders, it doesn't seem like you had significant failure of anything. The oil and water just looked like they had run in there while the head was being removed, there is no emulsion, the quantities are small and you can almost see where the oil has run in.
Good luck anyway. I panicked about my engine and thought about stripping the head again, but letting the thing run for a while seems to have sorted out most of the issues.
stu